Advantages & Disadvantages of a Sole Proprietorship

An excerpt from the Freelance Writer’s Toolkit.

A sole proprietorship is the easiest form of business to start, as there are virtually no legal formalities to complete. In a sole proprietorship the business has only one owner.

The business also does not have a legal identity distinct from the owner, and is therefore considered a personal wealth investment. The owners of a sole proprietorship only have to answer to themselves, but the business will cease to be a legal entity if the owner dies or sells the business.

A sole proprietorship has the ability to borrow funds, but that borrowing status is dependent on the owner’s personal financial status. The owners are personally liable for any defaults or lawsuits, and their personal property can be taken away in the event of a lawsuit.

Profits from a sole proprietorship are not taxed–they are considered as income on the owner’s personal taxes.

Order the Freelance Writer’s Toolkit for more help with starting and running a successful business.

Next: Finding Your Niche: Writing Corporate Histories

About Karen Y. Hamilton

Karen leads workshops in Creative Writing, Poetry and Journal Therapy, and Memoir Writing. She has studied genealogy and personal histories since 1987, lecturing and leading workshops on Memoir Writing and Journaling to the community since 1998. Karen holds a BA in English and has studied Literature, Business, and Education at the graduate level. She is a former college instructor of English Composition and Reading. In the past, Karen has worked as a high school & middle school teacher. She currently works as a Curriculum Specialist and is an MFA Creative Writing student at Florida Atlantic University.
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2 Responses to Advantages & Disadvantages of a Sole Proprietorship

  1. Pingback: Making a Business Plan « Karenzo Media

  2. I ran my little doctor practice alone for years. I was the first one there and the last one to leave, but nobody ever fired me.

    Dr. B

    drtombibey.wordpress.com

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